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Cohabitation

Since 4th May 2006 there are potential claims which could be made if you are in a cohabitation which ends in separation or death.

The Family Law (Scotland) Act 2006, which came into force on 4th May 2006, provides limited financial provision for cohabitants whose relationships end by reason of breakdown or death. This does not put cohabitants on the same legal footing as married couples. There is still no such thing as a common law wife or husband.

Provided an application is made to court within one year of the end of the cohabitation, a court may order a capital sum to be paid by one cohabitant to the other. The capital can be paid by instalments. The court will consider whether the applicant has suffered an economic disadvantage in the interests of their former partner, or their child (including a child accepted as a child of the family). The court will also consider whether the former partner has gained an economic advantage as a result of any contributions made by the other partner. “Contributions” can be financial or non-financial, like bringing up children.

The Court can also make an order to pay a specified amount in respect of the future economic burden of caring for any children of the cohabitants. That provision is not intended to cover basic living costs which child maintenance deals with. It could be used to cover a share of the future out of school care. Although the amount can be made payable by instalments, it can’t be varied if things change.

There are also two presumptions, which can be overturned, depending on the circumstances of the case. Firstly, there is a presumption that each cohabitant will share equally in household goods acquired (except by gift or inheritance from a third party) during the course of the cohabitation. “Household goods” don’t include money, cars or domestic animals.

Secondly, there’s a presumption of equal shares in money or property derived from any allowance made by either party for their joint household expenses. That doesn’t include property bought for the cohabitants to live in. “Property” does not include the cohabitants’ home. It is really important to consider carefully how title to any property is taken if you are buying a property jointly. You should consider whether you might want a cohabitation contract.

Unmarried couples still have no legal obligation to pay maintenance to each other if they separate, although there may be an obligation to pay maintenance for a child. There is no provision for the making of a transfer of property order, so you could not ask the Court to have the house transferred to you.

Provision is also made for surviving cohabitants to make a claim on their deceased partner’s estate, but only where there is no will. The claim must be made within a very short time - six months of the death, and the parties must have been cohabiting prior to death. The claim will be considered after any claim from the cohabitant’s surviving spouse or civil partner. The court will also have regard to any claims made on the estate by his or her surviving children. The maximum amount which a cohabitant can claim will not be more than would have been available to a surviving spouse or civil partner. If successful, the applicant could be awarded a capital sum or have property transferred from the deceased’s estate to him or her.

Financial provision for cohabitants is still unavailable elsewhere in the UK. Some cases have been decided in Court. The first decision about a claim arising from cohabitants who separated looked at the burden of childcare and financial disadvantage. It emphasised that the financial disadvantage of a homemaker working part time can be (and in that case was) balanced by the advantage of having the breadwinner’s income covering costs such as the mortgage over the family home. It also reinforced that the costs of future childcare such as breakfast clubs, after school clubs and holiday clubs can justify an award of money, payable in this case by instalments, though resulting in full payment long before the children’s childcare ended. Subsequent cases have also included some provision in respect of third party care. The trend has been to take quite a narrow view and set the bar quite high to establish financial disadvantage.

It is really worth considering having a cohabitation contract which will set out how you want to regulate your financial arrangements to avoid dispute later. The contract can be tailored to meet the specific requirements of your situation. For example, it can specify in detail the expenses for which each of you will be liable. It can be used to detail ownership of household goods, vehicles and other items. It can be used to determine how property is to be divided in the event of separation.